WeWork plans to file for bankruptcy, WSJ reports

WeWork Inc. could soon be filing for bankruptcy. According to reports, the filing could take place as early as next week.

The New York-based co-working company had one of the most dramatic trajectories during the last startup boom. After being founded in 2010, WeWork skyrocketed to a valuation of US$47 billion. It achieved this feat by raising billions of dollars and rapidly expanding its office spaces around the world. In addition, the company also dabbled in non-traditional projects, such as WeGrow – a private elementary school, WeLive – two residential buildings, and Rise By We – a gym concept.

Sadly, the success of the company was short-lived. A disastrous attempt at an initial public offering, as well as the challenges created by the pandemic, led to the company’s downfall. To address this issue, WeWork has recently entered into a forbearance agreement with its creditors and is actively exploring various opportunities to improve its balance sheet. This includes “rationalizing its real estate footprint”.

The company’s spokesperson has declined to comment on the bankruptcy speculation but has stated that WeWork has a “clear, long-term vision for the future”. They believe that the forbearance agreement will give them the opportunity to continue holding positive conversations with their stakeholders and moving forward with its strategic efforts to improve its capital structure.

It’s unclear where WeWork will file its Chapter 11 petition for bankruptcy. Reports indicate that the filing could take place in New Jersey. Nevertheless, it’s important to note that CICT and CDL remain unaffected by the bankruptcy warning.

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WeWork’s bankruptcy filing would mark the end of a remarkable story. From achieving a staggering valuation of US$47 billion to now potentially filing for bankruptcy, the company has had a rollercoaster of a journey. It serves as a testament to the unpredictable nature of the startup industry and how any company can suddenly become vulnerable to unpredictable changes in the market.